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Accounting Treatment/ presentation for additional capital?

Good pm! Its me again.. I am involved in a corporation on which a stockholder plans to add worth P5M of additional capital in line for business expansion. What will be the best presentation for this? If we will treat it as additional capitalization, we need to process another batch of SEC papers right? We cannot reflect is as Advances or Loan from Officers right? Could someone help me please.

Hi, what will be the additional P5M capital - an increase in authorized capital stock? or just subscription or issuance of additional capital stock? Processing SEC papers will only require if it's an increase in authorized capital stock. If your corporation, still have unsubscribed capital stock, they can be subscribed and issued without increasing the authorized capital stock. However, keep your eyes on watch so that your retained earning will not exceed your paid-in capital stock, or it will be subjected to Improperly ac***ulated earnings tax. Also additional subscription will result to do***entary tax on new subscribed shares.
The above applies when the corporation want to infuse fund through equity. Alternatively, the corporation can put additional fund through debt, instead of equity. Thus the P5M may be treated as an advances from stockholder (related party). Be sure to tally your forms / agreement (board resolution, MOA, loan agreement) on the transaction.

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If it will be treated as advances from stockholder, it will require related party disclosures. Related party disclosures are covered by Philippine Accounting Standard (PAS) / International Accounting Standard (IAS) 24. You can read the discussion of IAS 24 to gain understanding of this standard from this [URL="http://www.iasplus.com/standard/ias24.htm"]website from IASPlus.[/URL]

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Various transaction is use in issuance of capital.Issuance stokes dividend and split.Conversion preferred stock to common stock.When capital stock with a per value issued for cash. Contributed Capital are following.
1.Capital Stock
2.Additional paid in capital.

a. As additional subscription if authorized capital stock can still accommodate. This will require SEC application for exempt securities under SRC 10.1 and you need to pay DST;
b. Payment of subscription, if any. No need for SEC application on cash payments;
c. Increase of capitalization through cash infusion. This will require SEC application for increase and you will need an independent CPA for cash verification. DST will also be due.; or,
d. As an advances from stockholder. DST will also be due and the required disclosure.

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